Buying behavior is driven by complex social behaviors
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Most marketers embrace the economists’ worldview – we are rational people who buy products to fulfill our needs and when confronted with choices we make rational decisions.
Unfortunately that is not always the case – if ever.
Our buying behavior is very much influenced by our social behavior, which in turn is mostly determined by hardwired reflexes. That is what makes it so hard to predict what will sell and what will not. We buy things because they make us look cool, intelligent or well informed. We buy things because our mirror neurons drive us to want to imitate others. We buy things even though we know they are not good for us, and we do not buy things that are proven to have a positive effect on our condition. We buy things without the latest bells and whistles because we hate change. We buy things because we want to belong.
When we buy things, we do not act as rational beings.
Sure, we buy things based on recommendations from others, and avoid things that people badmouth. But it goes further than that – we buy things based on the behavior of the people who bought the same product, and more importantly based on the behavior of others who are observing the original buyers. That is true for personal fashion items as well as for enterprise software solutions.
On the one hand, that makes it a heck of a challenge to predict winners and losers in the marketplace. On the other hand it provides marketers with an opportunity to incorporate expected social behavioral reactions to new products into the product innovation process…
What do you think? Have you seen good examples of that? Hindsight of course is 20/20…but who does it well as a predictor of success?
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March 16th, 2009 at 9:38 am
Social is a context. The core influencer here is personal economics — the dynamic collection of rules we apply to make decisions: our personal rationale.
In the realm of economic thinking, ALL behavior is rational — it is based on our rationale. The most relevant thing we do as evaluators is to assess what the rationale might be and what the corresponding influencers are — based on the elasticity of those influencers.
It’s all economics.
March 16th, 2009 at 10:07 am
@Paula – Thanks for commenting on my post. One of the core points I was trying to make is that you can actually not predict buying behavior based on individual behavioral modeling – whether economic or social. I believe that the buying process is so dependent on the behavior of others in the system that we need something more akin to complex system’s modeling…but now the engineer in me is coming out
March 16th, 2009 at 1:40 pm
Nice thought provoking article!
I for one am not interested in predicting individual buying behavior right now, though it is a worthy & lofty goal in deed.
I will be gratified if I can merely influence communities’ buying behavior based on the complex social behavior patterns.
April 14th, 2009 at 4:01 am
I’m inclined to agree with Paula, but I’d like to know where you got the idea that social behaviour is determined by hardwired reflexes. For a good read on social behaviour, check out Mark Earls’ book ‘Herd’.
April 14th, 2009 at 7:47 am
Gordon – I wrote about the book in which they describe reciprocity as a reflex here:
http://www.emergencemarketing.com/2008/10/21/the-importance-of-reciprocity-in-ultrasocial-societies/
March 25th, 2009 at 12:06 am
I think recent research in consumer behavior is shifting the way marketers will aim to understand the consumer, by focusing more attention on our irrational nature. I recently read two interesting books related to irrational consumer behavior: Predictably Irrational and Buyology. It turns out that the economists were wrong in a way. Economics is based on humans acting rationally in their purchase decisions, but when it comes to deciding how to spend our money, most of us are far from rational.
This comment was originally posted on The Marketing Fresh Peel
April 18th, 2009 at 6:09 am
Connecting the Dots of the Irrational Consumer | The Marketing Fresh Peel – http://tinyurl.com/ced6xp
This comment was originally posted on The Marketing Fresh Peel